Decoding FMCG’s role in fostering India’s economic dream
Infrastructural improvements, paired with government initiatives and technological advancements, are providing a huge opportunity of growth for the FMCG, a very critical sector in terms of driving consumption in the country.
As India looks to become a $40 trillion economy, the FMCG sector is set to play a significant role in achieving this audacious goal. As India’s fourth-largest sector, FMCG is responsible for creating direct and indirect employment, rural and urban growth, fuelling expansion and is one of the main drivers of the economy.
Saugata Gupta, MD and CEO, Marico and Lingraju Sawkar, President,India engage in an enlightening conversation about the impact of FMCG on the growth of the Indian economy, with YourStory’s Founder and CEO, Shradha Sharma in the latest episode of ‘The New Springboard’ series. Powered by Kyndryl, the series brings together top leaders to brainstorm ideas and discuss pertinent aspects and perspectives that can springboard growth.
The Union Budget’s announcement on agriculture and capex investments along with revisions in tax regimes which will contribute to increasing disposable income and boost consumer demand and consumption have been hugely hailed by the FMCG makers.
“The government is driving a lot of consumption of Indian food grains, especially the millet programme. We have to promote our own food grains, and they are healthy any day. And that provides FMCG the opportunity to showcase that it is self-reliant and working towards doubling farmer’s income,” says Saugata.
Lingraju also threw light on how Kyndryl is actively contributing and participating in building the retail story of India by leveraging technology. Along with building and managing infrastructure for the critical services for the country, whether it is telecom, retail manufacturing, Kyndryl is now very heavily focused on the application data AI area. “We are now able to take it to the next level with our new application data practice, which brings in the ability to be able to translate some of the insights that can help make meaningful decisions for our clients,” he says.
Kyndryl India has also launched its new programme called Cyber Rakshak enabling 100,000 women in villages (village level entrepreneurs and self-help groups) with cyber education so that their monies are protected. “We believe that once you empower women and get them up, naturally the society at that level, the community and the family does take a significant upliftment,” he explains.
Walking the sustainable path
Marico as a company has always believed in conscious capitalism. Studies show that people who have invested behind purpose and sustainability long term, garner superior shareholder returns. Saugata also pointed out that GenZ is more inclined towards working for companies that have a purpose behind them. “The ability to attract and retain talent is also superior in our organisation, which focuses on sustainability and purpose,” he shares. Marico is continually working towards reducing PVC in its packaging, with its usage of plastic per ml of liquid packaging standing at the lowest in the industry.
What the future holds in the D2C space
As traditional brands haven't innovated enough at the top of the pyramid, in terms of creating brands with a purpose and meeting unmet needs, D2C players have got critical mass in all the developed markets of the world. As far as the digital brands are concerned, the velocity of innovation is far different, they think big and start small and their appetite for failure and risk is also very different from traditional brands. “We are strategic investors in all our brands. Despite having 51 percent stake, we let the founders run it in line with a culture of empowerment,” says Saugata.
Building to last rather than building to sell
Consumer packaged goods (CPG) is the only sector where brands transcend centuries due to the lack of intense technological disruption in this sector. All the innovation in FMCG is more format innovation and only some model innovation. CPG is an industry that is prone to stability, where there might not be significant positive surprises, but there won't be negative surprises either. Therefore, it is important to stay true to the brand's innovation and continuously fill the unmet need gaps. “We like to work with entrepreneurs or founders who believe in building to last rather than building to sell,” says Saugata.
With the enormity of the problem and the enormity of the opportunity being co-existent, Lingraju truly believes that it will be India’s decade to lead from the front and it is technology that will be at the helm of solving all problems. “The small town middle class value system that I come from, is sort of the larger India as well. That's what keeps us grounded, knowing where we came from, but that also gives us the aspiration to look at the art of possibility and when you look at people around you, you see the path and a clear way to get across,” he says.
“We as a nation, in terms of human capital, are the best in class globally and that's why we are doing so well. What is important for all of us is to recognise that India comes first,” adds Saugata. Concluding the conversation, Saugata also made a humble appeal to the GenZ, “I think it's fine to get Western education, but my request is, please come back and contribute to nation building. And I think this is India's decade and if we can pull it off, this could be India’s century,” he says.